The impact of the energy transition on China’s economy under the carbon peaking and carbon neutrality goal: A simulation analysis based on the CGE model

Abstract

With the acceleration of the global response to climate change, China announced to the world in 2020 the goals of carbon peaking by 2030 and carbon neutrality by 2060, which reflects its firm determination implement Intended Nationally Determined Contributions. Energy transition is the key to achieving the carbon peaking and carbon neutrality goals. It is of great theoretical and practical significance to study the impact of low carbon energy transition on China?s macro-economy under the carbon peaking and carbon neutrality goals. Based on three carbon neutrality scenarios, this paper uses the dynamic computable general equilibrium model to simulate and estimate the impact of different energy transition pathways on China?s macro-economy. The results show that under the carbon peaking and carbon neutrality target, accelerating energy transition will have a certain nega?tive impact on China?s economic growth, and different energy transition pathways have different impacts on the macro-economy. The sustainable transformation scenario that promotes energy transformation through the carbon tax policy to adjust carbon emission intensity and the renewable energy incentive policy to reduce costs has the least negative impact on the macro-economy, promoting employment growth, and optimizing industrial structure to a certain extent in the process of energy transformation. In conclusion, relevant policy recommendations are put forward for the achievement of the carbon peaking and carbon neutrality goals, and the promotion of high quality economic development.

Nudging Sustainable Development: Reviewing Energy Transition and Economic Development

“…Positive Energy transition has a benign net impact on economic development [3,32,42,62,66,87,100] Negative Energy transition may hinder economic development [19,36,43,46,119] Bidirectional Different energy transition paths, countries, or time periods lead to different results of economic development [21,25,41,44,59] Most scholars believe that energy transition itself seems to have a benign net impact on the macroeconomic fundamentals [66] as it fosters the adoption of economic means and solutions [87]. A macroeconomic model that considers regional, economic, and sectoral characteristics was used in [3], which found that energy transition provides opportunities for economic enhancement.…”

“…However, Ref. [44] established three scenarios and found that the impact of different energy transition paths on the macroeconomic performance of China is inconsistent. Energy transition has a positive contribution to the decoupling process in high-income economies, while it does not have a positive contribution to the decoupling process in middle-to high-income and middle-to low-income economies.…”

“…Different countries or regions have distinct energy transition paths with unique characteristics. Scholars often use scenario assumptions or factor analysis methods to explore these paths [44,45]. One approach involves setting different scenarios for various sectors based on the future energy transition goals, thereby identifying the transition pathways [41,105].…”

“…Additionally, there is a long-run and unidirectional causality relationship between economic growth and energy consumption [37,38]. Some scholars have taken a forward-looking approach, exploring the potential energy transition paths and strategies for one or multiple regions in the future, as well as the adjustments and impacts involving different sectors during the transition, including the phenomenon of decoupling from the economy [3,[39][40][41][42][43][44]. A possible reason for this is that the energy transition leads to certain costs.…”

Research on the electricity market clearing model with CCUS constraints

“…In the next stage, the focus of deepening the reform of the electricity system has shifted comprehensively to improving the construction of the electricity market mechanism. Meanwhile, carbon capture and utilization and storage (CCUS) is an important technology option to achieve the goal of carbon neutrality [2]. In recent years, China has attached great importance to the development of CCUS technology, and the maturity of related technologies has been rapidly improved, and a series of demonstration projects have been put into operation, showing the development trend that new technologies are emerging, efficiency is continuously improved, and energy costs are gradually reduced.…”